United States District Court, W.D. Washington, Seattle
CERTAIN UNDERWRITERS AT LLOYD'S LONDON SUBSCRIBING TO POLICY NO. WN128398, Plaintiffs,
THE BEST QUALITY CARE, INC., et al. Defendants.
ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT
Honorable Richard A. Jones, United States District Judge
the Court is Plaintiffs' Motion for Default Judgment.
Dkt. # 28. For the following reasons, the Motion is
are underwriters at Lloyd's, London, who seek to rescind
Policy No. WN128398 issued to The Best Quality Care Inc. (the
“Second Policy”). The Best Quality Care Inc. is
an adult care facility owned and operated by Mark Sokolskiy,
and Irina V. Sokolskiy. Dkt. ## 1, 29-2, 29-3. Plaintiffs
also seek a declaration that The Best Quality Care, Inc., The
Best Quality Care LLC,  Mark Sokolskiy, and Irina V. Sokolskiy
(collectively, “Best Quality Care” or
“Defendants”) are not entitled to coverage in
connection with claims asserted by Ilya Katsel as personal
representative of the Estate of Inna Katsel (the
issued Policy No. WN11414 to “The Best Quality Care,
Inc.” for the February 6, 2016 to February 6, 2017
period (the “First Policy”). Dkt. # 30-1 at 3.
During the policy period, on July 29, 2016, a resident at The
Best Quality Care, Inna Katsel, fell and died of her
injuries. Dkt. # 30-3. On or about August 9, 2016, Plaintiffs
received a request to increase the liability limits of the
First Policy and advised that they would do so only if Best
Quality Care provided a “No Known Loss” letter.
Dkt. # 30-4. On August 24, 2016, Plaintiffs received a
“No Known Loss” letter stating that there were no
facts or circumstances that could give rise to a claim. Dkt.
# 30-5. In reliance on Best Quality Care's
representations, Plaintiffs increased the liability limits of
the First Policy. Dkt. # 30, ¶ 4.
January 2017, Best Quality Care submitted a renewal
application for coverage. Dkt. # 30-2. The application
included negative responses to questions regarding any
awareness of circumstances that could give rise to a claim,
or complaints or fines imposed in the last year. Dkt. # 30-2
at 57. The application expressly stated that the
representations made therein are material and that any policy
will be issued based on those representations. Id.
In reliance on Best Quality Care's representations,
Plaintiffs issued Policy No. WN128398 (the, “Second
Policy”). Dkt. # 30, ¶ 5.
claim that there were material omissions in Best Quality
Care's application for the Second Policy, including (i)
the death of Inna Katsel and (ii) a September 1, 2016 report
from the Washington Department of Social & Health
Services (“DSHS”) concluding that Best Quality
Care did not have safety measures in place at the time of her
fall. Dkt. # 30-6 at 2-3. Defendants also failed to disclose
that DSHS subsequently levied a fine of $2, 000 for failing
to actively support the safety of a resident. Dkt. # 30,
¶ 5; Dkt. # 30-7.
the Estate sued Best Quality Care on December 13, 2017,
Plaintiffs issued a reservation of rights letter to Best
Quality Care, including a reservation of the right to rescind
the Second Policy. Dkt. # 30-11 at 5-6. On March 8, 2018,
Underwriters tendered back to “The Best Quality Care,
Inc.” the premium for the Second Policy. Dkt. # 30-12.
then filed this lawsuit on August 1, 2018. Dkt. # 1.
Defendants were all personally served. Dkt. ## 12-15. On
January 17, 2019, an order of default was entered against
Defendants. Dkt. # 26. On January 28, 2019, Plaintiffs moved
for default judgment against Defendants (the
“Motion”). Although the Estate filed a response
to Plaintiffs' Motion, on June 10, 2019, Plaintiffs and
the Estate stipulated to dismiss all claims against the
Estate with prejudice. Dkt. # 27. Plaintiffs' Motion is
now before the Court.
default judgment stage, the court presumes all well-pleaded
factual allegations are true, except those related to
damages. TeleVideo Sys., Inc. v. Heidenthal, 826
F.2d 915, 917-18 (9th Cir. 1987); see also Fair
House. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir.
2002). Although the entry of default judgment under Rule
55(b) is “an extreme measure, ” disfavored cases
should be decided upon their merits whenever reasonably
possible. Cmty. Dental Servs. v. Tani, 282 F.3d
1164, 1170 (9th Cir. 2002); also see Westchester Fire
Ins. Co. v. Mendez, 585 F.3d 1183, 1189 (9th Cir. 2009).
addition, Federal Rule of Civil Procedure 55(b)(1) permits
the court to enter default judgment when the plaintiff's
claim “is for a sum certain or a sum that can be made
certain by computation.” Fed.R.Civ.P. 55(b)(1). In
moving the court for default judgment, a plaintiff must
submit evidence supporting the claims for a particular sum of
damages. Fed.R.Civ.P. 55(b)(2)(B). If the plaintiff cannot
prove that the sum it seeks is “a liquidated sum or
capable of mathematical calculation, ” the court must
hold a hearing or otherwise ensure that the damage award is
appropriate, reasonable and demonstrated by evidence.
Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir.
1981); see also Getty Images (US), Inc. v. Virtual
Clinics, 2014 WL 358412 (W.D. Wash. 2014). In
determining damages, a court can rely on the declarations
submitted by the plaintiff. Dr. JKL Ltd. v. HPC IT Educ.
Ctr., 749 F.Supp.2d 1046 (N.D. Cal. 2010). Where there
is evidence establishing a defendant's liability, the
court has discretion, not an obligation, to enter a default
judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th
Cir. 1980); see also Alan Neuman Productions, Inc. v.
Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). Since
deciding for or against default judgment is within the
court's discretion, a defendant's default does not
de facto entitle a plaintiff to a court-ordered
judgment. Curtis v. Illumination Arts, Inc., 33
F.Supp.3d 1200, 1210-11 (W.D. Wash. 2014).